800 Midcon Jobs Eliminated

Pipeline Operation Being Reorganized

March 04, 1986|By Sallie Gaines.

MidCon Corp. said Monday that it has reorganized its pipeline operations, eliminating 800 jobs.

The company, about to be acquired by Occidental Petroleum Co., established MidCon Services to centralize pipeline-related activities, said MidCon spokesman Robert Tietz. As part of the reorganization, some MidCon units are being sold and others will be transferred to Cities Service Oil and Gas Corp., an Occidental subsidiary.

MidCon offered an early-retirement ``window`` to employees in affected units of pipeline operations. MidCon said Monday that about 800 employees accepted the offer and will be leaving the company ``in the near term.``

It was not clear whether the early retirements would eliminate the need for layoffs after the MidCon-Occidental merger. ``We`re still evaluating manpower requirements,`` Tietz said. ``But the 800 figure was just about where we hoped for on the retirement incentive program.``

MidCon`s major pipeline subsidiary, Natural Gas Pipeline Co. of America, carries about 90 percent of the natural gas used by utilities in Chicago and northern Illinois. MidCon was created in 1981 by People`s Energy Corp.

Under the new organization announced Monday, MidCon Vice Chairman George L. Morrow will be in charge of all pipeline operations. The new MidCon Services, headed by Dan B. Grubb, will manage all gas supply, transportation and exchange activities related to the company`s pipeline operations. The new unit also will be in charge of special marketing projects, though individual pipeline units will maintain their marketing staffs, MidCon said.

Besides Grubb, the heads of various pipeline companies in the MidCon operation also will report to Morrow to streamline the chain of command, MidCon said.

Another new unit, Operations Services, will provide engineering and other technical support to pipeline operations. That unit, also reporting to Morrow, is headed by Ronald MacNicholas, senior vice president.

MidCon noted in its proxy statement that four top executives are scheduled to receive cash bonuses before the Occidental merger is completed. Stockholders of both companies are scheduled to vote on the merger March 27, with paperwork completing the deal expected before the end of the month.

MidCon`s proxy said that Morrow; O.C. Davis, chairman and chief executive; Joseph M. Wells, vice chairman; and William C. Terpstra, president and chief operating officer, will get the cash ``in consideration of extraordinary services rendered to MidCon, not contemplated in their current employment arrangements.`` The proxy says part of the cash is in recognition that the men have given up ``certain benefits to be accrued in the future`` by agreeing to the merger.

Davis is to receive $1.2 million. Morrow is to get $829,245, Wells $676,194 and Terpstra $765,503, according to the proxy.

All four have contracts to remain with the combined company for three years after the merger. Davis will be executive vice president of Occidental and chairman of MidCon at an annual salary of $500,000. Morrow and Wells will be vice presidents of Occidental and vice chairmen of MidCon. Morrow will be paid $325, 000 and Wells $265,000. Terpstra will continue as president of MidCon at $300,000 annually.